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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2020	May 01, 2020
Document and Entity Information
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Entity Registrant Name	Scholar Rock Holding Corp
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		29,873,899
Entity Central Index Key	0001727196
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 95,434	$ 36,308
Marketable securities	65,214	121,140
Accounts receivable		25,000
Prepaid expenses and other current assets	3,525	2,719
Total current assets	164,173	185,167
Property and equipment, net	4,013	4,171
Operating lease right-of-use asset	4,188	4,447
Restricted cash	2,498	2,498
Other long-term assets	830	98
Total assets	175,702	196,381
Current liabilities:
Accounts payable	2,229	1,130
Accrued expenses	7,376	9,610
Operating lease liability	1,203	1,135
Deferred revenue	16,273	20,923
Other current liabilities	19	16
Total current liabilities	27,100	32,814
Long-term portion of operating lease liability	3,832	4,168
Other long-term liabilities	14	9
Long-term portion of deferred revenue	46,109	46,489
Total liabilities	77,055	83,480
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized at March 31, 2020 and December 31, 2019; no shares issued and outstanding at March 31, 2020 and December 31, 2019
Common stock, $0.001 par value; 150,000,000 shares authorized and 29,833,174 shares issued and outstanding as of March 31, 2020; 150,000,000 shares authorized and 29,792,922 shares issued and outstanding as of December 31, 2019	30	30
Additional paid-in capital	273,301	270,682
Accumulated other comprehensive income	234	37
Accumulated deficit	(174,918)	(157,848)
Total stockholders' equity	98,647	112,901
Total liabilities and stockholders' equity	$ 175,702	$ 196,381

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	29,833,174	29,792,922
Common stock, shares outstanding	29,833,174	29,792,922

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
Revenue	$ 5,030	$ 3,106
Operating expenses:
Research and development	16,902	10,739
General and administrative	5,822	4,070
Total operating expenses	22,724	14,809
Loss from operations	(17,694)	(11,703)
Other income (expense), net	624	948
Net loss	$ (17,070)	$ (10,755)
Net loss per share, basic and diluted (in dollars per share)	$ (0.58)	$ (0.42)
Weighted average common shares outstanding, basic and diluted (in shares)	29,527,349	25,592,659
Comprehensive loss:
Net loss	$ (17,070)	$ (10,755)
Other comprehensive income
Unrealized gain on marketable securities	197	24
Total other comprehensive income	197	24
Comprehensive loss	$ (16,873)	$ (10,731)

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total
Balance at beginning at Dec. 31, 2018	$ 26	$ 213,453	$ (8)	$ (106,848)	$ 106,623
Balance at beginning (in shares) at Dec. 31, 2018	26,217,701
Increase (decrease) in Stockholders' Equity
Unrealized gain on marketable securities			24		24
Restricted shares forfeited during the period (in shares)	(2,237)
Exercise of stock options		13			13
Exercise of stock options (in shares)	1,983
Equity-based compensation expense		1,618			1,618
Net Loss				(10,755)	(10,755)
Balance at end at Mar. 31, 2019	$ 26	215,084	16	(117,603)	97,523
Balance at end (in shares) at Mar. 31, 2019	26,217,447
Balance at beginning at Dec. 31, 2019	$ 30	270,682	37	(157,848)	112,901
Balance at beginning (in shares) at Dec. 31, 2019	29,792,922
Increase (decrease) in Stockholders' Equity
Unrealized gain on marketable securities			197		197
Exercise of stock options		405			405
Exercise of stock options (in shares)	40,252
Equity-based compensation expense		2,214			2,214
Net Loss				(17,070)	(17,070)
Balance at end at Mar. 31, 2020	$ 30	$ 273,301	$ 234	$ (174,918)	$ 98,647
Balance at end (in shares) at Mar. 31, 2020	29,833,174

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net loss	$ (17,070)	$ (10,755)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	391	271
Equity-based compensation	2,214	1,618
Amortization/accretion of investment securities	(177)	(365)
Non-cash operating lease expense	259	244
Change in operating assets and liabilities:
Accounts receivable	25,000
Prepaid expenses and other current assets	(806)	(206)
Other assets	(732)
Accounts payable	1,089	(98)
Accrued expenses	(2,234)	(3,016)
Operating lease liabilities	(268)	(130)
Deferred revenue	(5,030)	(3,106)
Other liabilities		13
Net cash provided by (used in) operating activities	2,636	(15,530)
Cash flows from investing activities:
Purchase of property and equipment	(209)	(681)
Purchase of marketable securities	(19,400)	(77,297)
Maturities of marketable securities	75,700	45,600
Net cash provided by (used in) investing activities	56,091	(32,378)
Cash flows from financing activities:
Principal payments on loan payable		(167)
Proceeds from stock option exercises	405	13
Other	(6)	(3)
Net cash provided by (used in) financing activities	399	(157)
Net (decrease) increase in cash and cash equivalents and restricted cash	59,126	(48,065)
Cash and cash equivalents and restricted cash, beginning of period	38,806	115,274
Cash and cash equivalents and restricted cash, end of period	97,932	67,209
Supplemental disclosure of non-cash items:
Property and equipment purchases in accounts payable and accrued expenses	$ 10	483
Operating lease right-of-use asset obtained in exchange for operating lease obligation		$ 5,349

Nature of the Business and Basis of Presentation	3 Months Ended
Nature of the Business and Basis of Presentation	Mar. 31, 2020
Nature of the Business and Basis of Presentation
Nature of the Business and Basis of Presentation	1. Nature of the Business Scholar Rock Holding Corporation (the “Company”) is a biopharmaceutical company focused on the discovery and development of innovative medicines for the treatment of serious diseases in which signaling by protein growth factors plays a fundamental role. The Company’s novel understanding of the molecular mechanisms of growth factor activation enabled the development of a proprietary platform for the discovery and development of monoclonal antibodies that locally and selectively target these signaling proteins at the cellular level. The Company’s first product candidate, SRK-015, is a highly selective fully human, monoclonal antibody, with a unique mechanism of action that results in inhibition of the activation of the growth factor, myostatin, in skeletal muscle. SRK-015 is being developed as a potential first muscle-directed therapy for the treatment of spinal muscular atrophy (“SMA”). SRK-015 is being evaluated in the Company’s TOPAZ Phase 2 proof-of-concept trial for the treatment of patients with Type 2 and Type 3 SMA. The Company’s second product candidate, SRK-181, is being developed for the treatment of cancers that are resistant to checkpoint inhibitor (“CPI”) therapies, such as anti-PD-1 or anti-PD-L1 (collectively called anti-PD-(L)1) antibody therapies. SRK-181 is a potent and highly selective inhibitor of the activation of latent transforming growth factor beta-1 (“TGFβ1”). The Company initiated the DRAGON Phase 1 proof-of-concept clinical trial of SRK-181 in patients with locally advanced or metastatic solid tumors that exhibit primary resistance to anti-PD-(L)1 antibodies in the first quarter of 2020 and patient dosing commenced in April 2020. Additionally, the Company continues to create a pipeline of novel product candidates with the potential to transform the lives of patients suffering from a wide range of serious diseases, including neuromuscular disorders, cancer, fibrosis and anemia. The Company was originally formed in May 2012. Its principal offices are in Cambridge, Massachusetts. Since its inception, the Company’s operations have focused on research and development of monoclonal antibodies that selectively inhibit activation of growth factors for therapeutic effect, as well as establishing the Company’s intellectual property portfolio and performing research and development activities. The Company has primarily financed its operations through various equity financings, including the initial public offering of its common stock (the “IPO”) in May 2018 and a secondary offering in June 2019, as well as research and development collaboration agreements. Revenue generation activities have been limited to two collaborations, both containing research services and the issuance of a license. The first agreement, executed in 2013, was with Janssen Biotech, Inc. (“Janssen”), a subsidiary of Johnson & Johnson. The second agreement (the “Gilead Collaboration Agreement”), executed in December 2018, was with Gilead Sciences, Inc. (“Gilead”). The Company began recognizing revenue on the Gilead Collaboration Agreement in 2019. No revenues have been recorded from the sale of any commercial product. The Company is subject to a number of risks similar to other life science companies, including, but not limited to, successful discovery and development of its drug candidates, raising additional capital, development by its competitors of new technological innovations, protection of proprietary technology and regulatory approval and market acceptance of the Company’s products. The Company anticipates that it will continue to incur significant operating losses for the next several years as it continues to develop its product candidates. The Company believes that its existing cash and cash equivalents, and marketable securities at March 31, 2020 will be sufficient to allow the Company to fund its current operations through at least a period of one year after the date the financial statements are issued.

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2020

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The significant accounting policies used in preparation of the unaudited consolidated financial statements are described in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2019, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K. There have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Reclassifications

Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year.

Cash and Cash Equivalents and Restricted Cash

The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows:


	As of March 31,
	2020		2019
Cash and cash equivalents	$	95,434	$	67,004
Restricted cash		2,498		205
	$	97,932	$	67,209

Unaudited Interim Financial Information

The consolidated financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited consolidated financial statements include the accounts of Scholar Rock Holding Corporation and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the results for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the related reporting of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The new standard aligns the requirements for capitalizing implementation costs for hosting arrangements (services) with costs for internal-use software (assets). As a result, certain implementation costs incurred in hosting arrangements are deferred and amortized. The new standard was effective for the Company on January 1, 2020 and was adopted prospectively. As such, there was no transition adjustment. There was no material impact to the Company’s net financial position or disclosures as a result of the adoption of ASU 2018-15.

Recently Issued Accounting Pronouncements

The Company has reviewed all recently issued accounting pronouncements and has determined that such standards do not currently apply to its operations.

Fair Value of Financial Assets and Liabilities

3 Months Ended

Mar. 31, 2020

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

3. Fair Value of Financial Assets and Liabilities

The following tables summarize the assets and liabilities measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019 (in thousands):


	Fair Value Measurements at March 31, 2020
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds, included in cash and cash equivalents	$	79,259	$	79,259	$	—	$	—
U.S. Treasury obligations, included in cash and cash equivalents		12,994		12,994		—		—
Marketable securities:
U.S. Treasury obligations		65,214		65,214		—		—
Total assets	$	157,467	$	157,467	$	—	$	—


	Fair Value Measurements at December 31, 2019
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds, included in cash and cash equivalents	$	34,896	$	34,896	$	—	$	—
Marketable securities:
U.S. Treasury obligations		121,140		121,140		—		—
Total assets	$	156,036	$	156,036	$	—	$	—

Cash and cash equivalents and marketable securities include investments in money market funds and U.S. government securities that are valued using quoted market prices. Accordingly, money market funds and government funds are categorized as Level 1 as of March 31, 2020 and December 31, 2019. There were no transfers of assets between fair value measurement levels during the three months ended March 31, 2020 or 2019.

The carrying amounts reflected in the balance sheets for accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values at March 31, 2020 and December 31, 2019, due to their short-term nature.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Marketable Securities

3 Months Ended

Mar. 31, 2020

Marketable Securities

Marketable Securities

4. Marketable Securities

The following table summarizes the Company’s investments as of March 31, 2020 (in thousands):


			Gross
	Amortized		Unrealized				Estimated
	Cost		Gains		Losses		Fair Value
Marketable securities available-for-sale:
U.S. Treasury obligations	$	64,980	$	234	$	—	$	65,214
Total available-for-sale securities	$	64,980	$	234	$	—	$	65,214

The following table summarizes the Company’s investments as of December 31, 2019 (in thousands):


			Gross
	Amortized		Unrealized				Estimated
	Cost		Gains		Losses		Fair Value
Marketable securities available-for-sale:
U.S. Treasury obligations	$	121,103	$	39	$	(2)	$	121,140
Total available-for-sale securities	$	121,103	$	39	$	(2)	$	121,140

Accrued Expenses

3 Months Ended

Mar. 31, 2020

Accrued Expenses

Accrued Expenses

5. Accrued Expenses

As of March 31, 2020 and December 31, 2019, accrued expenses consist of the following (in thousands):


	As of
	March 31,		December 31,
	2020		2019
Accrued external research and development expense	$	4,125	$	4,088
Accrued payroll and related expenses		2,204		4,380
Accrued professional and consulting expense		920		929
Accrued other		127		213
	$	7,376	$	9,610

Equity-Based Compensation

3 Months Ended

Mar. 31, 2020

Equity-Based Compensation

Equity-Based Compensation

6. Equity-Based Compensation

The Company recorded equity-based compensation expense related to all equity-based awards for employees and non-employees, which was allocated as follows in the consolidated statements of operations and comprehensive loss (in thousands):


	Three Months Ended
	March 31,
	2020		2019
Research and development expense	$	815	$	579
General and administrative expense		1,399		1,039
	$	2,214	$	1,618

Restricted Stock

The following table summarizes the Company’s restricted common stock activity as of March 31, 2020:


		Weighted
		Average Fair
		Value per Share
	Number of Shares	at Issuance
Restricted common stock as of December 31, 2019	302,360	$	5.77
Granted	—	$	—
Vested	(75,296)	$	5.77
Forfeited	—	$	—
Restricted common stock as of March 31, 2020	227,064	$	5.77

As of March 31, 2020, the Company had unrecognized equity-based compensation expense of $1.0 million related to restricted stock issued to employees and directors, which is expected to be recognized over a period of 1.1 years.

Stock Options

The following table summarizes the Company’s stock option activity as of March 31, 2020:


				Weighted
		Weighted		Average
	Number of	Average		Remaining	Aggregate
	Shares	Exercise Price		Contractual Term	Intrinsic Value
				(in years)	(in thousands)
Outstanding as of December 31, 2019	2,401,382	$	12.63	8.36	$	6,523
Granted	1,194,385	$	13.66
Exercised	(40,252)	$	10.05
Cancelled	(44,550)	$	14.00
Outstanding as of March 31, 2020	3,510,965	$	12.99	8.76	$	5,298
Options exercisable as of March 31, 2020	887,221	$	11.47	7.57	$	2,620

Using the Black-Scholes option pricing model, the weighted average fair value of options granted during the three months ended March 31, 2020 was $9.64.

The following assumptions were used in determining the fair value of options granted in the three months ended March 31, 2020:


Risk-free interest rate	1.42	%
Expected dividend yield	0.0	%
Expected term (years to liquidity)	6.25
Expected volatility	81.65	%

As of March 31, 2020, the Company has unrecognized equity-based compensation expense related to its employee stock options of $22.9 million which the Company expects to recognize over the remaining weighted average vesting period of 2.9 years.

Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies

Commitments and Contingencies

7. Commitments and Contingencies

Operating Leases

620 Memorial Facility Lease

In March 2015, the Company entered into a 5‑year facility lease for its corporate headquarters (the ‘‘lease’’) at 620 Memorial Drive in Cambridge, Massachusetts. The lease was amended in February 2018, to add an additional space (the ‘‘expansion space’’) at the current location and to extend the lease term (the ‘‘amended lease’’). The amended lease expires in September 2023. Rent for the facility lease, including the expansion space, increases from $1.4 million a year to $1.7 million a year over the term of the lease. Variable lease payments include the Company’s allocated share of costs incurred and expenditures made by the landlord in the operation and management of the building. The Company has the option to extend the term of the amended lease for one additional term of 5 years commencing after the amended lease expires.

Other information related to the Company’s lease is as follows (in thousands, except lease term and discount rate):


	For Three Months Ended
	March 31,
	2020
Lease Cost:
Operating lease cost	$	344
Variable lease cost		168
Total lease cost	$	512


	For Three Months Ended
	March 31,
	2020
Other information:
Operating cash flows used for operating leases	$	353
Weighted average remaining lease term		3.5 years
Weighted average incremental borrowing rate		6.47	%

The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of March 31, 2020 (in thousands):


Year Ending December 31,
2020 (excluding the three months ended March 31, 2020)	$	1,093
2021		1,619
2022		1,668
2023		1,279
Total lease payments		5,659
Less imputed interest		(624)
Total operating lease liabilities	$	5,035

301 Binney Facility Lease

In November 2019, the Company entered into a facility lease at 301 Binney Street in Cambridge, Massachusetts to be used as its new corporate headquarters. The expiration date of the lease is in August 2025 and the Company has the option to extend the term by two years. The base rent is $6.9 million per year, subject to an increase of 3.5%, and the Company is subject to a free-rent period through mid-August 2020. Variable lease payments include the Company’s allocated share of costs incurred and expenditures made by the landlord in the operation and management of the building. The Company is involved in the construction and design of the space and anticipates that it will incur construction costs, subject to an allowance for tenant improvements of up to $14.1 million. In connection with the facility lease, the Company has secured a letter of credit for $2.3 million which renews automatically each year. The lease commencement date, for accounting purposes, was not reached as of March 31, 2020 and therefore the lease is not included in the Company’s operating lease right-of-use asset or operating lease liabilities as of March 31, 2020.

Specifica Antibody Library

On December 20, 2019 (the “Effective Date”), the Company entered into a Library Development and Transfer Agreement with Specifica Inc. (“Specifica”), whereby Specifica is responsible for developing and delivering a customized antibody display library (the “Library”) for the Company to use to identify antibodies for further research, development, and commercialization. The Company will pay $3.7 million in fees through 2023 related to the Library.

Legal Proceedings

The Company, from time to time, may be party to litigation arising in the ordinary course of its business. The Company was not subject to any material legal proceedings during the three months ended March 31, 2020 and 2019.

Loan Payable	3 Months Ended
Loan Payable	Mar. 31, 2020
Loan Payable
Loan Payable	8. Loan Payable In August 2015, the Company entered into a Loan and Security Agreement with Silicon Valley Bank (‘‘SVB’’), which provided the Company an equipment line of credit of up to $2.0 million to finance the purchase of eligible equipment. The Company made the final payments on the loan in June 2019.

Agreements	3 Months Ended
Agreements	Mar. 31, 2020
Agreements
Agreements	9. Agreements Collaboration with Gilead On December 19, 2018 (the “Effective Date”), the Company entered into a Master Collaboration Agreement (the “Gilead Collaboration Agreement”) with Gilead to discover and develop specific inhibitors of TGFβ activation focused on the treatment of fibrotic diseases. Under the collaboration, Gilead has exclusive options to license worldwide rights to product candidates that emerge from three of the Company’s TGFβ programs (each a “Gilead Program”). Pursuant to the Gilead Collaboration Agreement, the Company is responsible for antibody discovery and preclinical research through product candidate nomination, after which, upon exercising the option for a Gilead Program, Gilead will be responsible for the program’s preclinical and clinical development and commercialization. Such option may be exercised by Gilead at any time from the Effective Date through a date that is 90 days following the expiration of the Research Collaboration Term (as defined below) for a given Gilead Program, or until termination of the Gilead Program, whichever is earlier (the “Option Exercise Period”). Prior to Gilead’s exercise of an option, the Company has the lead responsibility for drug discovery and pre-clinical development of all Gilead Programs through to Development Candidate Nomination. Within a certain period of time after receiving a data package for a Development Candidate Nomination, Gilead may exercise its option to enter into a Form of License Agreement for exclusive rights to develop, manufacture and commercialize the licensed antibodies and licensed products of such Gilead Program. Revenue associated with the research and development and license performance obligations relating to the Gilead Programs is recognized as revenue as the research and development services are provided using an input method, according to the costs incurred on each Gilead Program and the costs expected to be incurred in the future to satisfy the performance obligation. The transfer of control occurs over time. In management’s judgment, this input method is the best measure of progress towards satisfying the performance obligation. The amounts allocated to the three material rights will be recognized when Gilead exercises each respective option and delivers the underlying license and transfer of know-how, or immediately as each option expires unexercised. The amounts received that have not yet been recognized as revenue are recorded in deferred revenue on the Company’s consolidated balance sheet. None of the performance obligations have been fully satisfied as of March 31, 2020. A $25 million preclinical milestone was achieved in December 2019 for the successful demonstration of efficacy in preclinical in vivo proof-of-concept studies. As a result, the associated $25 million was included in the consideration transferred and proportionally allocated to the performance obligations, as it was probable that a future material reversal will not occur. In the three months ended March 31, 2020, the Company recognized $5.0 million in revenue in the Company’s consolidated statements of operations and comprehensive loss under the Gilead Collaboration Agreement. The aggregate amount of the transaction price allocated to the Company’s unsatisfied performance obligations and recorded in deferred revenue at March 31, 2020 is $62.4 million. The Company will recognize the deferred revenue related to the research and development services based on a cost input method, over the remaining research term for each respective Gilead Program, which is a maximum of 1.75 years as of March 31, 2020; each research term is dependent on the timing of Gilead either exercising its options for the Gilead Programs or terminating further development on the Gilead Programs prior to the expiration date of the research term. The Company expects the level of activity associated with the Gilead Programs to decrease in the near term, given the COVID-19 pandemic, which will have an impact on when the revenue is recognized for the Gilead Programs. The activity under the programs will be directly impacted by when the Company’s laboratory operations return to normal use.

Net Loss per Share

3 Months Ended

Mar. 31, 2020

Net Loss per Share

Net Loss per Share

10. Net Loss per Share

The Company calculates basic net loss per share by dividing net loss by the weighted average number of common shares outstanding, excluding restricted common stock. The Company has generated a net loss in all periods presented, so the basic and diluted net loss per share are the same, as the inclusion of the potentially dilutive securities would be anti-dilutive.

The following table sets forth the outstanding common stock equivalents, presented based on amounts outstanding at each period end, that have been excluded from the calculation of diluted net loss per share for the periods indicated because their inclusion would have been anti-dilutive:


	Three Months Ended March 31,
	2020	2019
Restricted common stock	227,064	571,437
Warrant	7,614	7,614
Stock options	3,510,965	2,271,870
	3,745,643	2,850,921

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Summary of Significant Accounting Policies

Reclassifications

Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year.

Cash and Cash Equivalents and Restricted Cash

The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows:


	As of March 31,
	2020		2019
Cash and cash equivalents	$	95,434	$	67,004
Restricted cash		2,498		205
	$	97,932	$	67,209

Unaudited Interim Financial Information

Use of Estimates

Recently Adopted and Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

The Company has reviewed all recently issued accounting pronouncements and has determined that such standards do not currently apply to its operations

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2020

Summary of Significant Accounting Policies

Schedule of reconciles of cash and cash equivalents and restricted cash


	As of March 31,
	2020		2019
Cash and cash equivalents	$	95,434	$	67,004
Restricted cash		2,498		205
	$	97,932	$	67,209

Fair Value of Financial Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value of Financial Assets and Liabilities

Schedule of summary of the assets and liabilities measured at fair value on a recurring basis

The following tables summarize the assets and liabilities measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019 (in thousands):


	Fair Value Measurements at March 31, 2020
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds, included in cash and cash equivalents	$	79,259	$	79,259	$	—	$	—
U.S. Treasury obligations, included in cash and cash equivalents		12,994		12,994		—		—
Marketable securities:
U.S. Treasury obligations		65,214		65,214		—		—
Total assets	$	157,467	$	157,467	$	—	$	—


	Fair Value Measurements at December 31, 2019
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds, included in cash and cash equivalents	$	34,896	$	34,896	$	—	$	—
Marketable securities:
U.S. Treasury obligations		121,140		121,140		—		—
Total assets	$	156,036	$	156,036	$	—	$	—

Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2020

Marketable Securities

Summary of investments

The following table summarizes the Company’s investments as of March 31, 2020 (in thousands):


			Gross
	Amortized		Unrealized				Estimated
	Cost		Gains		Losses		Fair Value
Marketable securities available-for-sale:
U.S. Treasury obligations	$	64,980	$	234	$	—	$	65,214
Total available-for-sale securities	$	64,980	$	234	$	—	$	65,214

The following table summarizes the Company’s investments as of December 31, 2019 (in thousands):


			Gross
	Amortized		Unrealized				Estimated
	Cost		Gains		Losses		Fair Value
Marketable securities available-for-sale:
U.S. Treasury obligations	$	121,103	$	39	$	(2)	$	121,140
Total available-for-sale securities	$	121,103	$	39	$	(2)	$	121,140

Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2020

Accrued Expenses

Summary of accrued expenses

As of March 31, 2020 and December 31, 2019, accrued expenses consist of the following (in thousands):


	As of
	March 31,		December 31,
	2020		2019
Accrued external research and development expense	$	4,125	$	4,088
Accrued payroll and related expenses		2,204		4,380
Accrued professional and consulting expense		920		929
Accrued other		127		213
	$	7,376	$	9,610

Equity-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2020

Equity-Based Compensation

Summary of allocation of equity-based compensation


	Three Months Ended
	March 31,
	2020		2019
Research and development expense	$	815	$	579
General and administrative expense		1,399		1,039
	$	2,214	$	1,618

Summary of restricted common stock activity


		Weighted
		Average Fair
		Value per Share
	Number of Shares	at Issuance
Restricted common stock as of December 31, 2019	302,360	$	5.77
Granted	—	$	—
Vested	(75,296)	$	5.77
Forfeited	—	$	—
Restricted common stock as of March 31, 2020	227,064	$	5.77

Summary of stock option activity


				Weighted
		Weighted		Average
	Number of	Average		Remaining	Aggregate
	Shares	Exercise Price		Contractual Term	Intrinsic Value
				(in years)	(in thousands)
Outstanding as of December 31, 2019	2,401,382	$	12.63	8.36	$	6,523
Granted	1,194,385	$	13.66
Exercised	(40,252)	$	10.05
Cancelled	(44,550)	$	14.00
Outstanding as of March 31, 2020	3,510,965	$	12.99	8.76	$	5,298
Options exercisable as of March 31, 2020	887,221	$	11.47	7.57	$	2,620

Schedule of fair value assumptions


Risk-free interest rate	1.42	%
Expected dividend yield	0.0	%
Expected term (years to liquidity)	6.25
Expected volatility	81.65	%

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies

Summary of lease costs

Other information related to the Company’s lease is as follows (in thousands, except lease term and discount rate):


	For Three Months Ended
	March 31,
	2020
Lease Cost:
Operating lease cost	$	344
Variable lease cost		168
Total lease cost	$	512


	For Three Months Ended
	March 31,
	2020
Other information:
Operating cash flows used for operating leases	$	353
Weighted average remaining lease term		3.5 years
Weighted average incremental borrowing rate		6.47	%

Summary of minimum lease payments

The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of March 31, 2020 (in thousands):


Year Ending December 31,
2020 (excluding the three months ended March 31, 2020)	$	1,093
2021		1,619
2022		1,668
2023		1,279
Total lease payments		5,659
Less imputed interest		(624)
Total operating lease liabilities	$	5,035

Net Loss per Share (Tables)

3 Months Ended

Mar. 31, 2020

Net Loss per Share

Summary of anti-dilutive securities


	Three Months Ended March 31,
	2020	2019
Restricted common stock	227,064	571,437
Warrant	7,614	7,614
Stock options	3,510,965	2,271,870
	3,745,643	2,850,921

Nature of the Business and Basis of Presentation (Details)	3 Months Ended
	Mar. 31, 2020 item
Nature of the Business and Basis of Presentation
Number of collaborations	2

Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Cash and cash equivalents and restricted cash
Cash and cash equivalents	$ 95,434	$ 36,308	$ 67,004
Restricted cash	2,498		205
Total	$ 97,932	$ 38,806	$ 67,209	$ 115,274

Fair Value of Financial Assets and Liabilities - (Details) - Recurring - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Assets:
Money market funds, included in cash and cash equivalents	$ 79,259	$ 34,896
Marketable securities:
U.S. Treasury obligations		121,140
Total assets	157,467	156,036
Cash and cash equivalents
Marketable securities:
U.S. Treasury obligations	12,994
Marketable securities.
Marketable securities:
U.S. Treasury obligations	65,214
Level 1
Assets:
Money market funds, included in cash and cash equivalents	79,259	34,896
Marketable securities:
U.S. Treasury obligations		121,140
Total assets	157,467	$ 156,036
Level 1 \| Cash and cash equivalents
Marketable securities:
U.S. Treasury obligations	12,994
Level 1 \| Marketable securities.
Marketable securities:
U.S. Treasury obligations	$ 65,214

Marketable Securities - Summary of Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Marketable securities available-for-sale
Amortization Cost	$ 64,980	$ 121,103
Gross Unrealized Gains	234	39
Gross Unrealized Losses		(2)
Estimated Fair Value	65,214	121,140
U.S. Treasury obligations
Marketable securities available-for-sale
Amortization Cost	64,980	121,103
Gross Unrealized Gains	234	39
Gross Unrealized Losses		(2)
Estimated Fair Value	$ 65,214	$ 121,140

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accrued Expenses
Accrued external research and development expense	$ 4,125	$ 4,088
Accrued payroll and related expenses	2,204	4,380
Accrued professional and consulting expense	920	929
Accrued other	127	213
Accrued expenses	$ 7,376	$ 9,610

Equity-Based Compensation - Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Equity-based compensation
Equity-based compensation expense	$ 2,214	$ 1,618
Research and development expense
Equity-based compensation
Equity-based compensation expense	815	579
General and administrative expense
Equity-based compensation
Equity-based compensation expense	$ 1,399	$ 1,039

Equity-Based Compensation - Restricted stock (Details) - Restricted common stock $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($) $ / shares shares
Number of unvested awards
Outstanding, beginning (in shares) \| shares	302,360
Vested (in shares) \| shares	(75,296)
Outstanding, end (in shares) \| shares	227,064
Weighted Average Fair Value
Outstanding, beginning (in dollars per share) \| $ / shares	$ 5.77
Vested (in dollars per share) \| $ / shares	5.77
Outstanding, end (in dollars per share) \| $ / shares	$ 5.77
Unrecognized equity based compensation expense \| $	$ 1.0
Period for recognition	1 year 1 month 6 days

Equity-Based Compensation - Stock Options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Number of Units
Outstanding, beginning (in shares)	2,401,382
Granted (in shares)	1,194,385
Exercised (in shares)	(40,252)
Cancelled (in shares)	(44,550)
Outstanding, end (in shares)	3,510,965	2,401,382
Options exercisable, end (in shares)	887,221
Weighted Average Exercise Price
Outstanding, beginning (in dollars per share)	$ 12.63
Granted (in dollars per share)	13.66
Exercised (in dollars per share)	10.05
Cancelled (in dollars per share)	14.00
Outstanding, end (in dollars per share)	12.99	$ 12.63
Options exercisable, end (in dollars per share)	$ 11.47
Stock options
Weighted average remaining contractual term	8 years 9 months 4 days	8 years 4 months 10 days
Weighted average remaining contractual term, exercisable	7 years 6 months 26 days
Aggregate intrinsic value, beginning	$ 6,523
Aggregate intrinsic value, end	5,298	$ 6,523
Aggregate intrinsic value, exercisable	$ 2,620
Weighted average grant date fair value (in dollars per share)	$ 9.64

Equity-Based Compensation - Assumptions (Details) - Stock options $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($)
Assumptions used in determining the fair value of options
Risk-free interest rate	1.42%
Expected dividend yield	0.00%
Expected term (years to liquidity)	6 years 3 months
Expected volatility	81.65%
Unrecognized equity-based compensation expense	$ 22.9
Period for recognition	2 years 10 months 24 days

Commitments and Contingencies (Details) $ in Thousands	1 Months Ended	3 Months Ended
Commitments and Contingencies (Details) $ in Thousands	Feb. 28, 2018 USD ($) item	Mar. 31, 2020 USD ($)	Mar. 31, 2015
Lease Cost:
Operating lease cost		$ 344
Variable lease cost		168
Total lease cost		512
Operating cash flows used for operating leases		$ 353
Weighted average remaining lease term		3 years 6 months
Weighted average incremental borrowing rate		6.47%
620 Memorial Drive, Cambridge MA
Leased assets
Term of lease			5 years
Option to extend the term	true
Number of renewal options \| item	1
Renewal term	5 years
620 Memorial Drive, Cambridge MA \| Minimum
Leased assets
Rent for facility lease	$ 1,400
620 Memorial Drive, Cambridge MA \| Maximum
Leased assets
Rent for facility lease	$ 1,700

Commitments and Contingencies - Maturities (Details) - USD ($) $ in Thousands	1 Months Ended
	Nov. 30, 2019	Mar. 31, 2020	Dec. 20, 2019
Maturity analysis of the annual undiscounted cash flows
2020 (excluding the three months ended March 31, 2020)		$ 1,093
2021		1,619
2022		1,668
2023		1,279
Total lease payments		5,659
Less imputed interest		(624)
Total operating lease liabilities		$ 5,035
Payment commitment			$ 3,700
301 Binney St, Cambridge MA
Maturity analysis of the annual undiscounted cash flows
Lease not yet commenced, option to extend the term	true
Lease not yet commenced, renewal term	2 years
Base rent	$ 6,900
Annual upward adjustment (as a percent)	3.50%
Incentive to lease	$ 14,100
Letter of credit	$ 2,300

Loan Payable (Details) $ in Millions	Aug. 31, 2015 USD ($)
SVB
Loan Payable
Line of credit maximum	$ 2.0

Agreements - Gilead (Details) $ in Thousands		1 Months Ended	3 Months Ended
Agreements - Gilead (Details) $ in Thousands	Dec. 19, 2018 item	Dec. 31, 2019 USD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2019 USD ($)
Agreements
Revenue earned			$ 5,030	$ 3,106
Gilead
Agreements
Number of programs \| item	3
Option exercise period	90 days
Revenue proceeds		$ 25,000
Revenue earned			$ 5,000

Agreements - Gilead obligation period (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 - Gilead $ in Millions	Mar. 31, 2020 USD ($)
Agreements
Contract liability	$ 62.4
Expected to recognize remaining deferred revenue	1 year 9 months

Net Loss per Share - Anti-dilutive (Details) - shares	3 Months Ended
Net Loss per Share - Anti-dilutive (Details) - shares	Mar. 31, 2020	Mar. 31, 2019
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share	3,745,643	2,850,921
Restricted common stock
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share	227,064	571,437
Warrant
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share	7,614	7,614
Stock options
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share	3,510,965	2,271,870